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Exam 10: Managing Property and Liability Risk

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Question 71

Multiple Choice

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Jennifer and Chad have a homeowner's policy with contents replacement-cost coverage for personal property up to 50 percent of the insurance on their home.What will the insurance company pay for their stolen property under the following situation? ​

A) $19,500
B) $34,500
C) $35,000
D) $44,500

E) C) and D)
F) B) and C)

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Question 72

Multiple Choice

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Classes of insured consist of insured who share similar characteristics.____ applicants in the class may qualify for lower premiums.

A) Standard
B) Preferred
C) Unacceptable
D) Substandard

E) A) and B)
F) A) and D)

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Question 73

Multiple Choice

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Fire,theft,illness,and accidents are all examples of

Risk-avoidance homeowners might want to insure their homes for 100 percent of replacement cost.

An insurance policy is a contract between the person buying insurance and the insurance company.

Which of the following HO forms is especially written renters?

____ are independent business people who act as third-party links between insurers and insureds.

____ policies provide open-peril protection for the dwellings covered under the policy.

When you have a homeowner's loss,you should not

Natalie has an auto insurance policy that includes both collision and comprehensive coverage.She has a $500 deductible on her collision coverage and a $200 deductible on her comprehensive coverage.Her car has a book value of $7,000 when her car is damaged by a tornado.The car will cost $8,500 to repair.How much will Natalie's insurance company pay in this situation?

One should assume risks that are affordable and insure against losses that would be unaffordable.

An insurance policy will pay the actual loss suffered not to exceed the policy limits.

____ is the most the insurance company would pay for both bodily injury and property damage liability in any one accident if the insured carried 300/500/200 coverage.

You should not keep the documentation for your personal property

Actual cash value of an asset represents the purchase price of the property less depreciation.

Theft damage is the most common peril for physical damage to automobiles.

Meeting an 80 percent replacement-cost requirement in your homeowner's insurance enables you to avoid incomplete coverage on small losses to your dwelling.

Residents of certain states such as Florida and Tennessee would be wise to add sinkhole insurance to their homeowner's insurance plan as it is typically not covered in the standard policy.

What is the first step in the risk-management process?

Which of the following types of insurance can be purchased only through a federal government program?